Success Factors for Effective Regional Innovation Policy
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1 Success Factors for Effective Regional Innovation Policy Karen Maguire Head of Regional Innovation Unit Regional Development Policy Division OECD Neukirchen, Austria 31 May 2011
2 OECD: Regions and Innovation Series OECD Reviews of Regional Innovation began 2007 Thematic reports on special topics such as clusters, globalisation, innovation policy Country/region reviews at the request of governments Inputs to territorial reviews, other OECD work (Innovation Strategy) Different levels of government seek policy advice: National governments that must support a diversity of region types (regional development, S&T, enterprise and industry, higher ed) Regional authorities that seek the right policy mix for their region Upcoming reviews: Wallonia (Belgium), Southern and Central Denmark 2
3 What do we mean by innovation? the implementation of a new or significantly improved product (good or service), or process, a new marketing method, or a new organisational method in business practices, workplace organisation or external relations. By definition, all innovation must contain a degree of novelty an innovation can be new to the firm, new to the market or new to the world. Innovation, thus defined, is clearly a much broader notion than R&D and is therefore influenced by a wide range of factors, some of which can be influenced by policy. Innovation can occur in any sector of the economy, including government services such as health or education.consideration is being given to extending the methodology [for innovation measurement] to public sector innovation and innovation for social goals. Source: OECD (2010) Ministerial report on the OECD Innovation Strategy: Innovation to strengthen growth and address global and social challenges: Key Findings, OECD, Paris based on OECD and Eurostat (2005), Oslo Manual Guidelines for Collecting and Interpreting Innovation Data, OECD Publishing, Paris.
4 Why regions matter for innovation policy A double paradigm shift even more today Rising relevance of regional dimension in national innovation strategies (systems approaches, critical mass in science, etc.) New regional development policy (mobilising knowledge & assets for growth) An evolving innovation scenario Increased globalisation (rise and fall of different regions) Societal and environmental challenges (new growth model of 3 E s: efficiency, equity, environmental sustainability; sub-national role) Increasing relevance of networks for innovation (in and across regions) Empirical evidence World is not flat, it has hot spots (half of R&D in 13% of regions, half of patenting in 20% of regions) Variety in regional innovation systems (within and across countries) Innovation modes (spatial dimension relevant in different ways)
5 What factors should be considered? To open the black box, consider three elements simultaneously 1. Institutional context 2. Innovation potential 3. Type of regional strategy
6 How do regions drive OECD growth? Contribution to OECD growth Contribution to OECD growth (TL2 regions, ) % of regions account for one third of OECD growth, the other 96% for two-thirds Dddddd Ddddddddddddddddd 307 Ddddddddddddddddd 1 0 TL2 regions 307 Dddddd dddddd ddddd y = x Source: OECD (2011) Regions and Innovation Policy, OECD publishing, Paris based on Garcilazo, E. and J. Oliveira Martins (2010), The Contributions of Regions to Aggregate Growth, paper presented to the Annual ERSA Conference, Stockholm, August 2010.
7 Different regional profiles across OECD regions Knowledge Hubs Knowledge-intensive city/ capital districts Knowledge and technology hubs Industrial Production Zones US states with average S&T performance Service and natural resource regions in knowledge-intensive countries Medium-tech manufacturing and service providers Traditional manufacturing regions Knowledge hubs Industrial production zones Non-S&T-driven regions Non-S&T driven regions Structural inertia or deindustrialising regions Primary-sectorintensive regions Notes: This map is for illustrative purposes and is without prejudice to the status of or sovereignty over any territory covered by this map. Maps may be cropped for ease of display. Eight different types of regional profiles, based on an analysis of 12 indicators in OECD regions with available data, were grouped into these three categories. Source: OECD (2011) Regions and Innovation Policy, OECD publishing.
8 Some countries have greater in-country diversity Hungary Austria Germany Medium-tech manufacturing and service providers: Central Hungary Traditional manufacturing regions: Central Transdanubia, Western Transdanubia Structural inertia or deindustrialising regions: Southern Transdanubia, Northern Hungary, Northern Great Plain Primary-sector-intensive regions: Southern Great Plain Knowledge intensive city/capital districts: Vienna, Traditional manufacturing regions: Burgenland, Lower Austria, Carinthia, Styria, Upper Austria, Salzburg, Tyrol, Vorarlberg Knowledge intensive city/capital districts: Berlin, Bremen, Hamburg Knowledge and technology hubs: Baden- Württemberg, Bavaria, Hesse, Medium-tech manufacturing and service providers: Lower Saxony, North Rhine- Westphalia, Saarland, Schleswig-Holstein, Rhineland-Palatinate, Saxony, Thuringia Structural inertia or de-industrialising regions: Brandenburg, Mecklenburg-West Pomerania, Saxony-Anhalt Note: These maps are for illustrative purposes and is without prejudice to the status of or sovereignty over any territory covered by this map. Maps may be cropped for ease of display. Source: OECD (2011) Regions and Innovation Policy, OECD publishing.
9 OECD peers in traditional manufacturing regions Note: This map is for illustrative purposes and is without prejudice to the status of or sovereignty over any territory covered by this map. Maps may be cropped for ease of display. Source: Ajmone Marsan, G. and K. Maguire (2011),Categorisation of OECD Regions Using Innovation-related Variables, Regional Development Working Papers, OECD Publishing, Paris
10 Range of performance varies by country Innovation Indicator Index (OECD median = 1) Innovation Indicator Indexe (OECD median = 1) United States top OECD and USA value USA - intra regional variation OECD - intra regional variation Massachusetts Mississippi OECD Median= Austria top OECD value -1 Tertiary educational att. Austria - intra regional variation OECD - intra regional variation Students in tertiary edu. Business R&D (% GDP) Government R&D (% GDP) Higher Education R&D (% GDP) Patents PCT (million inhabitants) High-technology GDP per worker employment 9 Wien 7 Burgenland top OECD value Portugal - intra regional variation 1-1 Tertiary educational att. Students in tertiary edu. Business R&D (% GDP) Government R&D (% GDP) Higher Education R&D (% GDP) Patents PCT (million inhabitants) High-technology employment 9 7 GDP per worker OECD Median= 1 OECD - intra regional variation Lisbon Norte Region Portugal OECD Median= 1-1 Tertiary educational att. Students in tertiary edu. Business R&D (% GDP) Government R&D (% GDP) Higher Education R&D (% GDP) Patents PCT (million inhabitants) High-technology GDP per worker employment
11 International linkages Diversity in innovation potential also related to internal and external system linkages OECD (2011) Regions and Innovation Policy, OECD Publishing, Paris based on Benneworth, P. and A. Dassen (forthcoming), Strengthening Global-Regional Connectivity in Regional Innovation Strategies, Regional Development Working Papers, OECD Publishing, Paris.
12 An illustration of collaboration patterns-all sectors Diversity and intensity of co-invention among top 20% of OECD TL2 regions (by number of total PCT applications), High intensity, More collaborators High intensity, Fewer collaborators Source: OECD (2011) Regions and Innovation Policy, OECD Publishing, Paris.
13 An illustration of collaboration patterns-green patents Hokuriku (Japan), Baden-Wurttemberg (Germany) and California (US), Source: OECD (2011) Regions and Innovation Policy with calculations based on the OECD REGPAT database.
14 Institutional context: regions have different STI competences Regional role Federal countries Countries with elected regional authorities Countries with non elected regional level / decentralised State agencies Significant control of STI powers and/or resources Austria, Belgium, Germany, Australia, Canada, Switzerland, United States, Brazil Italy, Spain UK (Scotland, Wales, Northern Ireland) Some decentralisation of STI powers and/or resources Mexico France, Netherlands, Poland, Sweden (pilot regions), Denmark (autonomous regions), Norway UK (English regions), Sweden (except pilot regions), Korea No decentralisation of STI powers Denmark, Portugal (autonomous regions), Slovak Republic, Turkey, Czech Republic, Chile, Japan Hungary, Ireland, Portugal (mainland), Greece, Finland, Luxembourg, Iceland, New Zealand, Slovenia Source: OECD (2011) Regions and Innovation Policy, OECD Publishing, Paris.
15 Type of regional strategy Strategic direction for regions 1. Building on current advantages science push, technology-led, or a mix 2. Supporting socio-economic transformation reconversion or identification of a new frontier 3. Catching up towards the creation of knowledge-based capabilities
16 There is no one recipe, but there is a menu for regional strategic choices Type of region Knowledge and technology hubs Knowledge-intensive city/capital districts US states with average S&T performance Service and natural resource regions in knowledge-intensive countries Medium-tech manufacturing and service providers main priority; strategic choice; low priority Building on current advantages Supporting socio-economic transformation Catching up Knowledge hubs Industrial production zones Traditional manufacturing regions Non-S&T-driven regions Structural inertia or de-industrialising regions Primary-sector-intensive regions OECD (2011) Regions and Innovation Policy, OECD Publishing, Paris.
17 Range of tools to implement goals Traditional instruments Emerging Instruments Experimental instruments Knowledge Generation Technology funds R&D incentives/supports/ grants Support to scientific research and technology centres Support to infrastructure development Human capital for S&T Public private partnerships for innovation Research networks/poles Knowledge Diffusion Science parks Technology Transfer Offices and schemes Technology brokers Mobility schemes Talent attraction schemes Innovation awards Innovation vouchers Certifications/ accreditations Knowledge Exploitation Incubators Start ups support innovation services (business support and coaching) Training and awarenessraising for innovation Industrial PhDs Support to creativity Innovation benchmarking Competitiveness poles Competence centres New generation of scientific and technological parks and clusters Venture and seed capital Guarantee schemes for financing for innovation Cross-border research centres Open source-open science markets for knowledge Regional Industrial Policy Innovation-oriented public procurement Source: OECD (2011) Regions and Innovation Policy, OECD publishing, Paris.
18 Multi-level governance of STI policy: OECD Survey results Regions play different roles in a multi-level governance context Formal and informal roles are both important Many regions and national governments are using the same policy instruments Proliferation of public support programmes (high transactions costs, difficulties for target groups) Insufficient levels of incentives for co-ordination in STI policy across and within levels of government Use of multiple multi-level governance tools, importance of dialogue and consultation
19 National Regional Common instruments Number of instruments used by level of government Austria Belgium Canada Germany Mexico Switzerland Some instruments are more frequent at regional level, some at national level, and many at both levels. United States Czech Republic Denmark France Italy Netherlands Poland Spain Instruments reported in common are not necessarily a duplication. They may be complementary: Shared financing Different target groups and purposes Sweden Finland Hungary Korea Norway Portugal United Kingdom (England) Notes: National refers to the number of instruments used at national level. Regional refers to instruments reported at regional level. Common instruments refers to the number of instruments reported at both national and regional level, which includes those instruments reported in the count of national and regional instruments. Source: OECD (2011) Regions and Innovation Policy, OECD Publishing, Paris based on an OECD-GOV Survey.
20 A menu of tools to work with other levels of government, and the private sector Number of countries Multiple tools are used in any given country (generally 4 or more) Number of coordination tools Regular dialogue and consultation rated most important among tools Note: 22 reporting countries (20 OECD, 2 non-oecd countries). Source: OECD (2011) Regions and Innovation Policy, OECD Publishing, Paris based on OECD-GOV Survey on the Multi-level Governance of Science, Technology and Innovation Policy. Note: 24 reporting countries (20 OECD, 4 non-oecd countries), one country reported two top tools. Source: OECD (2011) Regions and Innovation Policy, OECD Publishing, Paris based on OECD-GOV Survey on the Multi-level Governance of Science, Technology and Innovation Policy.
21 Regions as agents of change Regions can, and should, be agents of change Develop a vision and a strategic road map to encourage innovation Design a smart policy mix (asset-based and multisector) Establish multi-level, open and networked governance structures: Vertical and horizontal co-ordination Functional regions Stakeholders & private sector involvement Foster policy learning through better metrics, evaluation and experimentation
22 Example: regional innovation agencies Traditional focus New approaches Place of agency Outside the system Actor in the system Role Top-down provider of Facilitator, node in the system resources Rationale for intervention Market failures Systems failures, learning failures Mission Redistributing funds Identifying and reinforcing strengths in the system: a change agent Instruments Isolated Policy mix Accountability and control Administrative and Strategic, goal-oriented, mechanisms financial additionality Autonomy Focused on execution Expanded to strategic decisions Source: OECD (2011) Regions and Innovation Policy, OECD Publishing, Paris.
23 Common pitfalls in regional strategies One-size-fits-all approach (regions can t all be Silicon Valley or a leading biotech hub) High-tech bias (ignoring broader approach to innovation) Lack of sufficient private sector involvement Administrative boundary focus and not functional areas Lack of measurement and evaluation of progress
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